Wall Street's yo-yoing -- what lies behind it?

What's the matter with the stock market? The answer is that it's just as confused as everything else about the economy.

Measured on the standard Dow Jones scale, the value of American stocks and securities has declined something like one-fifth from the high point after President Reagan's election. The stock market has been the yo-yo of hopes and uncertainties in the Reagan administration and in world economic recovery.

It reached a high of 1,024 in mid-1981, when Mr. Reagan seemed to be leading the economy toward prompt improvement. Recently it sank below 800. Then, on Aug. 2, the Dow Jones average bounced up 13.51 points to 822 in response to a relaxation of interest rates. Everyone hoped that the turn to better times had finally come.

But the next day the Dow dropped 5.71 points, followed by a plunge of 12.94 points the following day. On Aug. 6 it slipped another 11.51 points to close out the week at 784.34.

In a larger sense the fluctuations reflect the uncertainty in the economy as a whole, not only of the United States but the world. A worldwide recession is under way. Several paradoxes have developed. President Reagan started out on a bold course of cutting taxes, but he is presently asking for one of the largest tax increase bills in history. The administration advocates a constitutional amendment requiring a balanced budget (except in war), but it is simultaneously supporting a budget whose 1983 deficit is variously estimated from $100-150 billion. According to one estimate, the nation is $1 trillion in debt.

The situation is also confused in international affairs. In the NATO alliance the US differs with its allies over participation in the Soviet trans-Siberian pipeline. At the same time the cost of world armaments rises, and nuclear rivalry with Moscow continues.

Expressed in domestic terms, America's unemployment reached a 41-year high of 9.8 percent in July with nearly 11 million out of work. This figure brought immediate political attacks by Democrats and corresponding reassurances from the administration. America's trade position in steel, autos, and some other goods has deteriorated, and there is the threat of a tariff war.

At home some financial institutions are overextended. This has sent tremors through financial markets. Michigan, center of the auto industry, is in economic trouble. Simultaneously, a far-reaching merger movement could reshape corporate ownership in American business.

One difficulty in Washington at this time of confusion is to discover who's in charge. Prime Minister Margaret Thatcher in England would likely be facing a general election on several issues if she confronted the same lack of authority. On the foreign side, Reagan has threatened Prime Minister Menachem Begin several times over Israel's assault on west Beirut, but it is far from certain whether this will have any effect.

In the more specific area of American tax policy, President Reagan's intercession may have more immediate consequences. In a series of meetings at the White House with congressional leaders Mr. Reagan urged prompt passage of the pending compromise tax bill that is estimated to raise $98.5 billion over the next three fiscal years. The President canceled a planned 10-day California vacation to participate in the tax battle here.

According to Sen. Howard H. Baker Jr. (R) of Tennessee, spokesman for the tax conferees, Reagan is giving ''total support'' to the tax increase. The measure now requires passage by the House and acceptance in conference. Reagan has heretofore endorsed the bill, without pledging an all-out campaign. A major critic of the tax increase is a former ally, Rep. Jack Kemp (R) of New York, who backs the supply-side theory of economic recovery and argues that business and individuals are presently overtaxed. The conflict is characteristic of the widespread confusion here.